Low stock and bond market returns are making real estate investment more attractive, but its essential to recognize and manage the risks. Real estate is not a passive investment, and due to limited liquidity in many market conditions, it is more even more of a buy and hold investment than many stocks or mutual funds.
Investors should plan to be in a particular market, through ups and downs, for a decade or more. Investors can do extremely well adding quality, well-researched real estate in the long-term hold portion of their portfolio, but its essential to be informed about the risks, rewards and strategic approaches in advance.
If you analyze a property only for its potential income and capital cost, youll often end up buying a risky investment many rookies have lived to regret buying properties because of price rather than potential. Successful real estate investment requires buying in markets with strong underlying economics, today or projected for the near future. A strategic approach is critical, and knowledge of a region is more important than knowledge of a particular property.
Don R. Campbell began his investing career in 1985 with a house purchased in Mission, BC. He is Founding Partner and Senior Analyst at The Real Estate Investment Network and currently owns nearly 200 doors in BC and Alberta. A seven-time best-selling author, Dons expertise and passion for teaching Canadians how to create wealth through real estate are far-reaching and have made an impact on the lives of thousands. You can follow his daily thoughts on Twitter www.twitter.com/DonRCampbell and on Facebook at www.facebook.com/thereinman.